JUNE 13, 2018 IFC DISCLOSURE AND TRANSPARENCY TOOLKIT: BEYOND THE BALANCE SHEET

JUNE 13, 2018 IFC DISCLOSURE AND TRANSPARENCY TOOLKIT: BEYOND THE BALANCE SHEET

WHY DISCLOSURE AND TRANSPARENCY TOOLKIT? BACKGROUND ON IFC ESG INTEGRATION Changes in Best Practices/Conclusion that E&S needs to be integrated into CG Standard setters > UN PRI, ICGN, WFE, UN SSE, IOSCO, OECD, EU, US SEC, TCFD, Reporting & Disclosure > GRI, IIRC, SASB Institutional Investors / Asset Managers > Aviva Investors, Cartica Capital, Bank of Montreal, Triodos Various Standards and Codes (S.A., Brazil, H.K., etc.) incorporated E&S/Sustainability Data providers > BBG, ISS, Thomson Reuters (Asset4), MSCI, Sustainalytics Rating agencies > S&P, Moody s Governance of Stakeholder Engagement

BUILDING MARKETS IN EMERGING ECONOMIES Consistent with IFC s strategy to create capital markets.. help companies in emerging economies access global capital markets, help global investors better price the risk of investing in these markets, and help stock exchange, regulators and market authorities in developing countries improve local market infrastructure

IFC Disclosure & Transparency Toolkit IFC Sustainability Frameworks Corporate Governance Methodology Performance Standards for Environmental & Social Sustainability Global Sustainability Frameworks International Accounting Standards

IFC Toolkit: Advancing Best Practices Introduction Why This Toolkit Benefits of Disclosure and Transparency Drivers of ESG Reporting Comprehensive and Integrated Approach to Reporting Incorporating Sustainability Part 1: Disclosure Framework Strategy Business Model and Environment Strategic Objectives Risk Analysis and Response Sustainability Opportunities & Risks Key Performance Indicators Corporate Governance Commitment to ESG Board Structure and Functioning Control Environment Minority Shareholders Stakeholder Engagement Performance Performance Report Financial Statements Sustainability Statements Part 2: Reporting Guidance Appendixes Materiality Information Quality Scope of Disclosure Disclosure Requirements Reporting Formats

HOLISTIC AND INTEGRATED REPORTING APPROACH

CORE TOOL CG PROGRESSION MATRICES LEVELS PARAMETERS Commitment to Good Corporate Governance Level 1 Basic Practices Level 2 Intermediate Practices Level 3 Good International Practices Level 4 Leadership Structure and Functioning of the Board of Directors Control Environment P R O G R E S S I O N Transparency and Disclosure Treatment of Minority Shareholders

IFC CG/ ESG Matrix Commitment to ESG (Leadership and Culture) Structure and Functioning of the Board of Directors Appropriate Documentation: Charter(s), ToRs, etc. ESG integration and Stakeholder Engagement Board Oversight of ESG/Board level committee to review ESG issues National/Global Leader in ESG Composition, Structure, Practices, Meetings, Committees, Independence and Skills Board approves sustainability strategy and E&S policies Board verifies ESMS in place and audited ESG issues are a recurring Board agenda item Board member with understanding of E&S risks, and if sensitive industries, then at least one E&S Expert Control Environment IC, IA, RM and Compliance ESMS integrated into the corporate Risk Management framework Head of E&S/ Sustainability has unfettered access to the Board and reports to the Risk Management Committee of the Board Disclosure and Transparency Treatment of Minority Shareholders Governance of Stakeholder Engagement Financial Reporting (IFRS & ISA) and Annual Report Annual Report includes ESG reporting Annual Report uses IIRC, GRI, SASB, etc. ESG data is subject to independent assurance AGMs, Voting Rights, Fair Treatment, Access to Information Investor relations Stakeholder Mapping Stakeholders Engagement Policy: workers, customers, regulators, affected communities, NGOs, CSOs, supply chain workers, etc. Grievance Mechanisms Worker and Affected Communities

IFC Toolkit: Advancing Best Practices Sustainability reporting (GRI) Financial reporting (IFRS) Integrated Reporting (SASB) Integrated reporting (IIRC) IFC DT framework Objective Intent is to improve sustainability of organisations and support sustainable development to provide financial information that is useful in making investment decisions Help public corporations disclose material sustainability information in mandatory SEC filings Increase holistic, longterm, integrated thinking considering multiple capitals and improve allocation of financial capital Improve capital flows to emerging markets by reducing actual and perceived risk Audience Multiple stakeholders Current/potential capital providers, lenders Investors Providers of financial capital All stakeholders are addressed, investors are prioritized What is material? Issues that Have significant economic, environmental and social impacts May influence stakeholder decisions Information is material if failure to include it could have an impact on the decision making of reporting users. Substantial likelihood that a reasonable investor would view information as significantly altering the total mix of information Matters that substantially effect value creation over the short, medium and long-term A combination of 1) financial materiality; and 2) sustainability material

FLEXIBLE DISCLOSURE & TRANSPARENCY FRAMEWORK

BEYOND THE BALANCE SHEET: USERS Users Disclosure Framework Strategy & Sustainability Corporate Governance Performance D&T Toolkit Stock Exchanges & Regulators Data providers Institutional Investors & Asset Managers Companies & banks

THANK YOU!